First Mover: Bitcoin Investors the Sane Ones as Federal Reserve Cheers Inflation, Price Nears $11K

One of the interesting things about cryptocurrency investors is that they really do look at the world very differently from many of their counterparts in traditional finance.

The thinking goes something like this: The efforts of governments and central banks to repair the economy are doomed to fail, and likely to make the situation worse. There is no point in moving to a defensive investment strategy, because prices for digital assets are going to the moon. Every time the stock market goes up, it just validates the reality that the dollar is being debased by trillions of dollars of central-bank money printing.

The latest turn-logic-on-its-head zinger came Monday from Dan Morehead, a former Wall Street trader and hedge-fund executive who now heads the cryptocurrency-focused investment firm Pantera Capital in the San Francisco area.

In a monthly letter, Morehead was discussing how central banks typically succeed when they pointedly attempt to increase inflation, as the Federal Reserve is now pursuing as an official policy. He cited Venezuela and Zimbabwe as two prior success stories, as it were.

Morehead then pivoted to the argument that asset prices “are not rising because stock fundamentals have improved,” but because “a huge wave of money is being printed.”

“Gold is at a 5,000-year high,” Morehead wrote. “Or, said another way, paper money is at an all-time low.”

dollars-in-gold-terms
Gold prices in dollars an ounce, inverted scale.
Source: TradingView

It’s that counterintuitive, “put another way” perspective that can sometimes seem refreshing, partly because the crypto investor keeps getting proven right. Audiences on both Wall Street and broader society are now becoming more receptive to the idea that the traditional financial system and economy are both unsustainable and unfair.

The Federal Reserve’s top monetary-officials meet this week to discuss their next steps for healing the economy, which at this point appears to consist of…

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